ZestFinance goes after 'near-prime' middle class market segment
15 July 2015 | 1909 views | 0
Today, ZestFinance, a financial technology company, unveiled Basix, a new online loan product that will provide much-needed credit for millions of middle-class Americans often denied loans by banks.
Additionally, the company will make its new near-prime credit-decisioning technology - built on its proven machine learning platform - available to help other lenders serve more US consumers.
“ZestFinance was founded to make fair and transparent credit available to everyone, especially those left out of traditional credit systems,” said Douglas Merrill, Founder & CEO of ZestFinance. “Basix will serve regular, hard-working people whose credit scores are just below levels that would allow them to qualify for a bank loan - tens of millions of Americans. Our customers are middle-class Americans who have insufficient credit histories or have weathered a financially-draining life event and are building or rebuilding their credit.”
The near-prime consumer market is challenging for lenders to serve because it is difficult to determine credit-risk using traditional underwriting methods. Instead of analyzing the limited number of credit variables most traditional underwriting methods consider, ZestFinance’s machine-learning based credit-decisioning technology analyzes tens of thousands of data points to effectively evaluate creditworthiness. ZestFinance’s technology identifies good borrowers in the near-prime credit segment where traditional credit scores indicate lower credit quality.
Basix can help responsible borrowers improve their credit
Basix - unsecured personal loans - will be available for a three-year term at fixed annual percentage rates (APR) from 26% to 36%. Monthly payment amounts and APR do not change over the course of the loan. Basix also offers borrowers a 15-day grace period to give borrowers every opportunity to make on time payments. Initially, Basix loans will range from $3,000 to $5,000 and will be available in the near-term in Alabama, Georgia, Missouri, New Mexico, South Dakota, and Utah. Later this year, Basix will be available nationwide.
Borrowers can improve their credit by making their payments on time and repaying their Basix loans. ZestFinance will report Basix borrower payment performance to credit reporting agencies, helping responsible borrowers improve their credit history over time.
Basix simplifies the loan process with an easy-to-use online application, clear upfront pricing, low monthly payments, and the flexibility to save money by paying back early. People can apply for a loan at www.basixloan.com, and in minutes find out if they qualify.
New near-prime credit-decisioning technology now available to other lenders
ZestFinance is making its new near-prime credit-decisioning technology - built on its proven machine learning platform - available to other lenders so they can more effectively determine creditworthiness in this segment. It will enable lenders to expand consumer access to low cost credit, while improving repayment rates.
“Our technology enables lenders to transform how they make credit decisions and in doing so, meet the needs of millions of people who are currently underserved by banks,” said Douglas Merrill. “By helping other companies make more accurate credit decisions, we can greatly expand the availability of fair and transparent credit and transform consumer lending.”